(Permission to rebroadcast in whole or in part is hereby granted. A courtesy super or CG crediting the Mackinac Center would be appreciated.)

Transcript below.

"Michigan has defeated Texas in the race to land a brand-new
plant that builds solar panels. That company, GlobalWatt, will be opening right
here in mid-Michigan," WNEM TV5 reported on Dec. 16, 2009.

On the surface, the headlines in December 2009 were joyous.
Solar-panel maker GlobalWatt would set up in Saginaw. The governor even
highlighted the so-called "victory" in her State of the State address.

"In fact, GlobalWatt
literally left Silicon Valley in California to set up shop in an abandoned auto
plant in Saginaw," the governor said.

One published report said the deal was made possible by $42
million in tax breaks from both the state and the city of Saginaw. GlobalWatt
executives have been using the news of those tax awards as a selling point to
investors.

The Mackinac Center looked into the applications for
Michigan tax credits. Center Fiscal Policy Director Michael LaFaive found the
information GlobalWatt submitted to the state just doesn't add up.

"For instance, both of the applications argue that the state
of Texas and a local unit of government in Texas — what we know to be Corpus
Christi — had offered substantial upfront cash incentives. We know that
to be false," LaFaive said.

A spokesperson for the Corpus Christi Regional Economic Development Corp. told the Mackinac Center that "We did not offer 'upfront'
cash." The spokesperson clarified that while Corpus Christi did offer grants, they
were performance-based only.

And then there's the timing. GlobalWatt submitted one
application for Michigan tax credits in November, the other in December. Again,
both contained claims that Texas had tax incentive offers on the table.

LaFaive stated: "However, public records indicate that those
incentives, that incentive offer, was withdrawn long before the CEO of GlobalWatt
signed the application saying that there were these incentives available to
them. In addition, with regard to the state of Texas, another application was
signed by the CEO of GlobalWatt that also said that these incentives were
available, even though he would have received a rejection letter for the
request for incentives weeks before he'd even signed on the MEGA application.
So again, that's just two, now, inconsistencies that we see in the MEGA
application."

GlobalWatt's dubious claims on its Michigan tax credit applications
is the latest in a string of high-profile cases of blunders involving the Michigan
Economic Growth Authority, or MEGA, and the Michigan Economic Development Corp.,
which administers the MEGA program.

"In March of this year, we learned that Richard A. Short had
been approved for a refundable tax credit equal to about $9.1 million through
the state's MEGA program," LaFaive said. "It was discovered shortly thereafter
that Mr. Short was actually a convicted felon out on parole, who wasn't even
allowed to possess a credit card, as part of his parole agreement."

Then in May, the Mackinac Center uncovered alleged
fraudulent activity involving tax credits for a proposed West Michigan film studio.
Like GlobalWatt, it was touted by the governor in her State of the State
address:

"We uncovered some discrepancies between the amount of money
that was claimed to have been invested in the film studio and the actual cost
of the building," LaFaive said. "Subsequent research by the state actually led
to a single fraud charge [against] the alleged buyer, Joe Peters."

LaFaive says the questions raised by the Mackinac Center
about GlobalWatt's tax credits prove the state has not followed through on
promises to more carefully screen its applicants. Those promises included
scrutinizing agreements reached prior to the Richard Short-RASCO deal in March.

"Now we have this GlobalWatt deal, which they even said on record
they had investigated retroactively after the deal had been signed, because, in
part, of the Richard Short embarrassment," said LaFaive. "Now we know that it
appears they did not really look too deeply into the matter. You know, I discovered
these inconsistencies between what was said on the application and what we now
know to be true, simply with a few phone calls to Texas and a Google search. The
data was available — all you gotta do is look for it."

GlobalWatt did not return calls from the Mackinac Center.

LaFaive points out while rooting out any malfeasance involving tax credits is
important for taxpayers, it's only part of the solution to an overall larger
problem.

LaFaive said: "Even if these deals had not bubbled to the
surface and been exposed, the program itself is a failure, and the empirical
evidence is pretty clear. So on balance, we argue that the program could be
eliminated, and should be eliminated, in favor of across-the-board tax cuts for
all businesses, and not a favored few."

#####

Kathy Hoekstra is a communications specialist at the Mackinac Center
for Public Policy. The Mackinac Center for Public Policy is a research
and educational institute headquartered in Midland, Mich. Permission to
reprint in whole or in part is hereby granted, provided that the author
and the Center are properly cited.